Traders Corner   36 comments

S&P 500 Daily Momentum: Bearish
S&P 500 Daily Overbought/oversold: Neutral, leaning oversold
S&P 500 Weekly Momentum: Bearish
S&P 500 Weekly Overbought/oversold: Neutral
S&P 500 Futures (June): Negative
Overall: The McClellan Oscillator is getting close to oversold territory. Another day like yesterday could set us up for a bounce (although it might be a dead cat bounce). The S&P 500 futures are pointing below the 50 day moving average, so it is looking like we could break below that level today, at least at the open.

The S&P 500 levels to watch today:

UPSIDE: 1849-1850 (January’s high and December’s high), 1863 (April 4th’s low), 1864 (April 7th’s high and the 20 day moving average), 1867 (February’s high), 1882-1885 (3 data points and March’s high), 1891 (top of the Bollinger Bands), 1893 (2 data points), and 1897 (April 4th’s high and the all-time high).
LAST CLOSE: 1845.
DOWNSIDE: 1841 (April 7th’s low), 1839 (50 day moving average), 1836 (bottom of the Bollinger Bands), 1834 (March’s low), 1825 (100 day moving average), 1788 (150 day moving average), 1775 (October’s high), 1770 (January’s low), 1767 (December’s low), and 1756 (200 day moving average).

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36 responses to “Traders Corner

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  1. FYI: Stock futures have shifted into positive territory since I posted earlier. We may be getting our bounce early today.

  2. ILF etf up 15% in last month, nice move in emerging markets.

  3. So far, a weak response after two big down days. What is troublesome is the weakness in the SPY weekly chart. Last week my leading indicator had a very weak response to a decent week. Starting to look like we are going to see the 100 day ma around 1825. Hope somebody bought silver yesterday.

  4. Sold 20% of my LMNS. Lost 13%. Not my best trade.

  5. Take a look at coal, aci and btu in particular. They’re continuing to show strength. I wouldn’t buy aci here but btu could still see upside to 20. I will probably sell calls on my btu soon depending on what I see into the close.

    • Coal might make a good day or swing trade but in general, the writings on the wall and this whole industry is going no where.

      • Not so sure Jeff. Probably true as long as the libs are in control. May change if we get a more conservative Washington. Also,the rest of the world doesn’t have the same attitude towards coal.

      • Trader, the biggest consumer of coal is China. Have you seen those pictures of Chinese cities where people can’t see their hands in front of their faces. Wealthy Chinese are actually moving out of the country just to get away from the pollution. Solar, Solar, Solar for peak power. Until they solve the storage problem, we’ll need fossil fuels for power generation but I just don’t see coal as being anything but a rapidly declining industry.

        There may be some spikes but I’m staying away.

      • Personally I think this is a big miss perception.

        Who actually believes that the coal burning plants are in these cities?
        Coal is general burned in plants far from where it is actually used.

        The smog you are looking at is from other sources like cars, and the last time I check they are not running on coal.

      • When I was in China, there were a lot of people burning coal to heat woks and do general cooking and heat. Coal may ultimately fade, but it won’t be in our lifetime. Coal use is still increasing. India and China have a long ways to go before they even start to reduce usage, much less replace it. Solar is very limited in its ability right now and there are serious technical hurdles to clear before it is the solution.

      • Thanks w_seattle for the China perspective, I forgot that they actually do still use it in their cities so that does matter. You would have thought they would have done away with that while building their brand new huge cities.

        But like you say it doesn’t change the fact that at our present level of consumption of energy and our current technical abilities there is no way that “alternate energy” let alone solar can fill this gap.

        It has probably changed somewhat, but a few years ago it was stated that it takes an acre of solar panels to give you what one barrel of oil provides. And the US alone consumes millions of barrels of oil a day (it consumed 7 billion in 2010, which is 19.18 million per day). Calculate that out and you find you don’t have enough land in all of the US to do it with solar panels. Of course it shouldn’t be done with solar panels it should be done with solar reflectors, but that is another matter.

      • Chris – we are putting a new roof on our house this summer and we are going to look at solar. I will have a better idea in a couple months of the efficiency of solar, but I am anticipating that it will be a good investment (we live in Ct which has the second highest electricity costs in the country).

  6. Just sold some Apr 25 530 calls on my aapl shares for 11.75. If I get called out, I’ll have a small loss on my shares. If not I’ve just reduced my basis from 545 to about 533. AAPL looks to fall over the next couple months pending new product launches expected in Sept. so I do not expect that I will get called.

    If I do get called, I’ve got better uses for the cash in May anyway.

  7. Emerging markets may move up a little. Looks like we are getting close to a top.

  8. Had GWPH from January. As I’m following it down, but still in the green, I see that the May 70.00 call is going for 2.60. That seems like a high premium for a stock that is falling as it is. I picked the 70.00 strike so called or not is about the same to me. Anyone think this looks okay?(maybe), or did I miss something?(quite possibly)

    • Charles, the reason the premiums are high is the expectation that there will be some good news and the stock will take off like a rocket. If you like the stock and plan to hold for a while there is nothing wrong with selling the 70 calls. Like PRAN there is extra risk and you know what happens if the news is bad. I noticed the bid/ask spread is large. It’s 240/310 now. I would put in a limit order at 280 and see if it sells. If it doesn’t fill right away you can lower your price by 5 until it does. If the price of the stock stays where it is, I think you can do better than 240.

      • Trader, thank you. I managed 2.60 for the May 16 70.00 CALL. PRAN, Ouch! That’s one that I’ll have for a while as I dig myself out of the hole.

  9. Update on my position in EDC. I bought at an average cost of 31.10 at the end of Oct 2013. Bad timing, right at the high. Since then have sold calls at a 32 strike price for a total premium of 3.22 reducing my basis to 27.88. Today I bought back my April 32’s. I sold them for 1.41 and bought them back for 10. This is included in the 3.22. Currently have May 32’s covering my position. If called my profit will be 4.12 14.8%. Not bad for an etf that has gone no where. If not called, I’ll keep selling calls. This is a good example of how you can make money with a stock or etf that has done nothing but go down.

  10. If anyone out there (besides me) holds LMNS, research has just come out.
    Goldman – buy with a $17 target
    Wells Fargo – outperform with. $14 to $15 target
    Credit Suisse – outperform with $14 target.

    I plan to hold remainder of my shares through their quarterly earnings to see of buy ratings are deserved.

    • Did any of these guys participate in the IPO?

      • Oh you cynic! But of course. GS and CS were managers (along with Jefferies) and WFC was a co- manager. Wonder when Jefferies “buy” will come out?

      • Marshall do you know when their first quarterly earnings will come out? I’m still wondering why the IPO price was set $4 less that estimate at the last minute?

    • Doesn’t seem like the buyers care. Trading close to it’s low for the day. Good luck Marshal. Hope it moves higher.

      • Trader – I get your point. The main reason I am holding LMNS is because they are actually a real company making real money. They are trading at 17x last years earnings and they have a lot in the pipeline. I would not hold for the sole reason that banks involved their IPO are pounding the table. If their 1st earnings have some decent growth/ guidance, they could pop. I do not know the date. Typically, you have to report 45 days after quarter close, but their are special rules allowing more time for company’s immediately post IPO.

      • Marshall, I understand your reasoning. I would have expected at least a temporary bounce on the big boys report. As you know, I play only on technicals and what I see in how the price moves. So far, those have been weak. Having said that, you might get your bounce on earnings. I think it is high risk. If the earnings aren’t good it could drop big since it doesn’t seem to be showing any strength. Hope it works out.

      • Thanks for support. I hope it works out as well. Otherwise I will be sharing a sizable capital gains loss with Uncle Sam. It did bounce this morning, but has really pulled back.

  11. Marshall, I’m liking one of your choices, CTCM. It seems to have bottomed out. If this Ukrainian thing doesn’t heat up further in the next week I may buy. Are you still feeling good about this stock?

  12. This afternoon I placed a sell order on CTCM. This has been a very good stock for me in under a month, up right at 6%. I had originally intended to hold for a longer period, but the recent stock market action has made me want to hold more cash and CTCM has some unique risks that I admittedly do not fully understand.

  13. Moved a little further into cash today. Not too much, just 5%. Probably should have done a little more since I do not see earnings pushing us up a lot. It will be interesting to see ALCOA’s earnings. They are expected to be pretty positive and I’m hoping they might help continue the bounce tomorrow?

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